Drivers in BC now paying carbon tax

VANCOUVER, British Columbia (Reuters) - North America's
first comprehensive carbon tax is now in British Columbia,
greeted with complaints that some gasoline stations have used
the tax as cover to raise prices more than necessary.

The already-controversial tax, which took effect on
Tuesday, added 2.34 cents per litre to the pump price, but some
stations pushed up prices more than 4 cents, the Vancouver Sun
reported on Wednesday.

British Columbia officials were not available for comment
on the increases that pushed the price at some service stations
to more than C$1.50 a litre, some of highest prices in Canada.

The tax, which is the first comprehensive carbon use-based
tax in North America, places a fee of C$10 per tonne of carbon
emissions on all fossil fuels. That will increase C$5 per ton a
year for the next four years.

Supporters say the tax will encourage people to use energy
more efficiently and is needed for British Columbia to meet its
goal of reducing greenhouse gas emissions linked to global
warming by 33 percent by 2020.

The government says the tax's goal is environmental not
revenue-raising. It has been offset by cuts in income taxes,
and residents last month received a C$100 rebate that officials
hoped would put into energy-saving uses.

Critics have derided the fee as a "tax grab" that will hurt
the economy and the poor, and say that recent increases in
gasoline prices are already forcing people to reduce their
energy consumption.

While drivers saw the immediate impact of the tax on Canada
Day, other consumers will soon see it in their utility bills or
bills for transportation and other services.

A spokeswoman for Terasen Gas said higher natural gas
prices have encouraged customers to use the fuel more
efficiently in recent years, but she said the utility did not
have data on the likely impact of the carbon tax on demand.

Because the tax is based on carbon content, the utility
hoped it might prompt drivers to switch from using gasoline or
diesel to alternative fuels such natural gas for their
vehicles.